AEO factory refer to factory stores or outlets of the AEO or American Eagle Outfitters brand.  This brand is one of the US’ biggest names in the retail industry.  American Eagle Outfitters is famous for their line of clothes and accessories for both men and women.  Established back in 1977 by the Silverman brothers, AEO has grown to become an international clothing and accessories brand.  With its success on its flagship retail outlets across the US, the company also ventured into opening its own version of its factory stores called the AEO factory.  These factory outlets sell AEO merchandise at significantly lower prices than standard retail stores and boutiques located in malls and shopping districts.

Factory outlets are so-called because the stores are originally located near the warehouses and factories of retailers.  The concept of factory stores eventually evolved into retail outlets that sell merchandise at lower costs.  Most factory outlets including the AEO factory sell merchandise from previous collections or seasons and this is basically the reason why they can be sold at lower prices.  In many cases, older merchandise from standard boutiques and retail stores are consolidated in factory outlets like the AEO factory.  With this practice, AEO merchandise that are sold in AEO factory typically have lower price tags.  There are also instances wherein retailers specifically create and manufacture products for their factory outlet customers.  With the same look or design, the cost of goods may be controlled by using alternative fabric or by employing a different quality standard.

In the case of American Eagle Outfitters, the brand has positioned itself to sustain its growth in the US and expand its presence internationally.  With the establishment of AEO factory, the brand is able to attract more customers especially among the mid to low-income demographic.  With numerous competing brands in the retail clothing and accessories industry, AEO factory stores have contributed to the overall success of the AEO brand.